The Broad Aim of this proposal is to advance the field of Bone Tissue Engineering by defining general principles and techniques that can be applied to the rapid harvest and intra- operative transplantation of bone marrow derived connective tissue progenitors (CTPs). Work in the initial funding period has defined methods by which CTPs can be rapidly concentrated and positively selected from human bone marrow using an implantable matrix as a surface for selective cell attachment. We have also shown that composite cellular grafts prepared in this way significantly improve the efficacy of bone grafting procedures. This rapid and simple method for concentration and delivery of CTPs offers promise to improve many clinical grafting procedures and other tissue engineering applications through controlled preparation and delivery of cellular composite grafts. Realizing this promise requires a improved understanding and control over the interaction between cells matrix surfaces and the metabolic environment created within a cellular graft. Experimental control over surface properties modulating CTP attachment and selection, as well as survival, proliferation and differentiation is obtained using a molecular surface design approach. A set of small peptide ligands have been strategically selected from the literature based on evidence of interaction with CTPs. These peptides are be presented on a chemically stable but degradable substrate, polycaprolactone(PCL), and screened for specific dose dependent effects on these biologic parameters. Because hypoxia at the site of implantation will have profound effects on the biologic performance of transplanted cells, and the effects of ligands are expected to modulate cellular response to hypoxia, the effect of hypoxia on CTP survival and biologic performance is assessed. The selective attachment of CTPs and other subsets of marrow cells are evaluated in 3D porous matrices providing precise control over ligand presentation, structure and porosity. Selected cellular 3D composite grafts will then be evaluated in vivo to refine effective strategies for optimizing graft efficacy, through control of CTP concentration, cell density, cell composition, and matrix porosity. Quantitative in vivo assessment is made of oxygen tension, metabolic demand, revascularization in the graft site. Quantitative microCT and histology are used to assess bone and tissue formation. Using this unique combination of technologies, we will define fundamental biologic principles. related to cell-matrix interaction, matrix surface chemistry, matrix architecture and effects of local hypoxia that can be applies to the design of cellular implants containing marrow derived cells in a broad range of materials and tissue engineering applications.